Yahoo Stock Not Enough To Sway AOL

Twenty percent of Yahoo for eighty percent of AOL added up to a big fat zero for Time Warner executives, who decided the proposed swap wasn't a good value.

Would they have said yes to Google stock, instead? A source to Time Warner told the Wall Street Journal that Yahoo made the 20 for 80 offer for AOL. Yahoo denied ever making that offer, though.

Time Warner did not want to give up majority control of AOL, which the Yahoo proposal would have required. Yahoo withdrew from negotiations earlier this week, the Journal had previously reported.

Time Warner could still say yes to Google, or possibly Microsoft. The two technology companies have been pushed into a rivalry by the media; that rivalry will turn more real when Microsoft finally debuts its paid search advertising solution. Even with that, Microsoft still has to overcome Google's dominance as the global search leader.

Lurking at the periphery of the negotiations for AOL, News Corp magnate Rupert Murdoch said in the report that his company isn't in the negotiations. But any advances from News Corp would have to wait until the Microsoft-Google competition gets resolved.